Maritime Risks Rise Even As Somali Piracy Recedes

LONDON – For all of human history, the maritime environment has presented a complex and challenging operating environment. For most people, shipping remains an invisible industry despite its critical role in today’s global economy. There was a brief spike in public interest a few years ago when Somali pirates provided a modern-day outlet for coverage about contemporary swashbuckling on the high seas. But pirate activity off the Horn of Africa has ebbed considerably, and with it most public concern.

Yet last year saw a 26% spike in maritime piracy and armed robbery, according to statistics compiled by Control Risks. This marked the highest level since 2011. Somali pirates accounted for a mere 4% of global activity, and attacks by Nigerian groups in the Gulf of Guinea—another piracy hotspot in recent years—declined by 12%. Asia accounted for 30% of the global total.

In fact, the Americas saw more maritime crime than Africa in 2014—predominantly port and anchorage crimes involving theft or robbery. But Western Hemisphere ports have other risks as well. Labor disputes caused disruptions at ports in Chile and Costa Rica last year, and inadequate infrastructure has turned many Latin American ports into bottlenecks with lengthy waiting times.

Asia was the region with the most attacks on vessels in 2014; criminal activity there reached the highest levels in a decade. Most incidents occurred within the territorial waters of Indonesia and Bangladesh. While this uptick seems likely to persist for the shipping industry in 2015, a greater threat for the oil and gas sector is the potential for skirmishes in the East and South China Seas. The prospect of all-out war remains remote, but geopolitical tensions and territorial disputes will nevertheless shape the maritime security environment in Asia for the foreseeable future.

This holds true globally, too. Though criminal activity is a persistent risk, maritime operators are more likely to be affected by broader political, operational and security risks in the year ahead. Civil conflict and political instability in countries adjacent to key waterways will complicate mobilization and transshipment. Geopolitical uncertainty over Russian sanctions will continue to affect dry bulk container and tanker shipping. Oil and gas operators will face further scrutiny from activist groups over Arctic drilling. Meanwhile, an increase in the number of migrants fleeing conflicts in North Africa and the Middle East will place further strain on Mediterranean shipping routes.

Tom Patterson is Associate Director for Maritime Services at Control Risks, the global risk consultancy.

Control Risks is a specialist global risk consultancy that helps organizations manage risks, seize new opportunities, and resolve complex issues or crises. Visit us at www.controlrisks.com or follow us on Twitter @Control_Risks